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Gas Prices Top $3 A Gallon, May Keep Climbing

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The Associated Press

Published: November 6, 2007

Updated: 11/05/2007 09:55 pm

NEW YORK - Gasoline prices jumped back above $3 a gallon at the pump Monday even as concerns about the economy and increases in crude supplies sent oil prices lower.
Retail gas prices have been slow to catch up with soaring crude prices, which have gained nearly 39 percent since late August to a trading high of $96.24 on Thursday. Gas prices only started rising steadily in mid-October.

The national average price of a gallon of gas rose 1.5 cents overnight to $3.004, and has jumped almost 25 cents in three weeks, according to AAA and the Oil Price Information Service.

The sharp jump in gas prices could continue if oil keeps surging to new heights.

"The consumer has been relatively isolated from these prices," said Amanda Kurzendoerfer, commodities analyst at Summit Energy Services in Louisville, Ky.

But, she said, if oil prices don't retreat, gas prices could reach $3.50 or $4 a gallon by next summer.

According to gasbuddy.com, a Web site that tracks gasoline prices throughout the United States and Canada, the lowest pump price on Monday morning in the Bay area was $2.79 a gallon at a Murphy gas station in Gibsonton. The bulk of service stations in the area sold regular gas at $2.81 to $2.93 a gallon, the Web site said.

"While it is frustrating for motorists to pay high prices at a time when they ordinarily decrease, history suggests that both oil and gasoline prices will drop before Thanksgiving," Randy Bly, director of community relations for AAA Auto Club South, said in a statement.

Meanwhile, light, sweet crude for December delivery fell $1.95 to settle at $93.98 a barrel on the New York Mercantile Exchange on Monday.

Earlier Monday, oil futures rose above $96 a barrel, but concerns about the mortgage industry's effect on the economy reasserted themselves on equity and energy markets as the day wore on.

News on oil supplies and demand contributed to Monday's selling. Iraqi crude exports rose by nearly 200,000 barrels a day in October to 1.84 million barrels a day, according to PVM Oil Associates Ltd. in Vienna. In addition, Russian oil output rose 0.6 percent last month compared with the previous month, marking a new post-Soviet high of 9.93 billion barrels a day, PVM said.

A separate survey of analysts by Dow Jones Newswires suggests the Organization of Petroleum Exporting Countries raised crude oil production in October by 1.24 percent, or 382,000 barrels from the previous month to 31.23 million barrels.

But the International Energy Agency on Monday said global crude oil demand will rise to 98 million barrels a day in 2015 from the 84 million barrels a day now, Dow Jones Newswires reported.

Tribune reporter Keith Morelli contributed to this report.

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